Tourism Snapshot A Monthly Monitor of the Performance of Canada s Tourism Industry

Tourism Snapshot A Monthly Monitor of the Performance of Canada s Tourism Industry December Volume 13, Issue 12 www.destinationcanada.com Tourism Snapshot December 1

KEY HIGHLIGHTS In, international arrivals to Canada reached a new all-time high of 20.85 million (+4.4% over 2016), surpassing the record high of 20.06 million previously set in 2002 by 3.9%. US visitors (14.33 million, +3.1%) continued to make up the majority of tourist arrivals to Canada in. Among Destination Canada s core markets, the Asia- Pacific region (1.90 million, +11.4%) led arrivals, followed by Europe (1.76 million, +0.7%), and Latin America (498,000, +39.3%). Overnight arrivals from non-us (overseas) origins (+7.2%) expanded at a pace slightly ahead of global international arrivals as reported by the UNWTO (+6.7%) in, with Destination Canada s ten overseas markets (+9.1%) expanding at twice the rate of non-destination Canada markets (+4.0%). These results reflect a shifting landscape for the Canadian tourism industry when compared with the previous peak in 2002, when just 19.4% of visitors to Canada came from overseas origins (vs. 31.3% in ). Destination Canada s emerging Asia-Pacific and Latin America markets are also playing a larger role in overseas visitation, ahead of the historically strong European markets, with Destination Canada s target markets in Latin America leading year-over-year growth and Asia-Pacific now overtaking Europe as Destination Canada s largest overseas region in. Much of the growth recorded in was driven by increased direct air arrivals, both from the US (+6.6%) and from overseas (+9.5%). This progress was particularly evident in direct air arrivals from Destination Canada s Latin American markets (+60.3%) and Asia- Pacific markets (+16.6%). The ongoing expansion of air access to Canada in was closely linked with this growth, with seat capacity increasing significantly overall (+7.0%) and in particular in Destination Canada s core markets Latin America (+45.7%), Asia-Pacific (+22.2%), Europe (+4.4%), and the US (+3.8%). Note the following caveat from Statistics Canada associated with the December data: Data for Statistics Canada s Frontier Counts program are produced using administrative data received from the Canada Border Services Agency (CBSA) on all international travellers who have been cleared for entry or re-entry into Canada. This includes residents of Canada, the United States and overseas entering Canada from abroad. In, the CBSA began introducing the electronic Primary Inspection Kiosk (PIK) system at airports in Canada. The PIK system replaces the E-311 Declaration Cards that are completed by international travellers to Canada. As of the end of November, the PIK system was deployed at the following airports: Macdonald-Cartier, Ottawa (March ), Vancouver (April ), Toronto International Airport T3 (June ), Edmonton (September ), Halifax (October ), and Pierre-Elliot Trudeau, Montréal (November ). While awaiting receipt of PIK data, Statistics Canada has prepared preliminary estimates for airports at which PIK has been deployed. These estimates are based on CBSA reports of total international travellers by airport, while the distribution between Canadian, US and travellers from individual overseas countries are modelled estimates based on historical data and trends, using methods similar to those used to do seasonal adjustment. Statistics Canada recently reached an agreement with CBSA on access to this data, and the estimates for these airports, as well as the provincial and national totals to which they contribute, will be revised in the near future. Note also that figures reported at the Douglas (Peace Arch) land port in BC were partly estimated and will be revised at a future date. QUICK LINKS 2 Tourism Snapshot December

Industry Performance Dashboard December YTD Overnight 1 Total International 4.3% 4.4% 11 DC Markets** 4.4% 4.4% United States 3.7% 3.1% 10 Overseas Markets 7.1% 9.1% Non-DC Markets 3.0% 4.0% Air Seat Capacity 2 Total International 7.6% 7.0% 11 DC Markets** 5.9% 6.5% Non-DC Markets 11.2% 8.1% National Hotel Indicators 3 Occupancy Rate* 1.6 1.8 Revenue Per Available Room (Revpar) 3.8% 4.8% Average Daily Rate (ADR) 7.3% 7.8% Notes: The Industry Performance Dashboard figures are year-on-year variations. * Percentage point variations. ** The 11 DC markets are US, France, Germany, UK, Australia, China, India, Japan, South Korea, Brazil and Mexico. Sources: 1. Statistics Canada, Frontier counts, custom tabulations 2. IATA-Diio SRS Analyser 3. CBRE Hotels with reproduction and use of information subject to CBRE Disclaimer / Terms of Use as detailed at www.cbre.ca. Tourism Snapshot December 3

MARKET MONITOR SUMMARY Overnight i Arrival YOY Variations (%) Air Seat capacity ii Local currency vs. CAD iii Market Dec. YTD Dec. YTD Dec. YTD Dec. Average YTD Average United States United States 944,412 14,328,645 3.7% 3.1% 4.2% 3.8% -4.2% -2.1% France 38,450 570,803 2.2% 4.6% 2.8% 2.7% 7.5% -0.1% DC Europe Germany 15,455 388,320-6.3% 5.2% -6.6% 8.9% 7.5% -0.1% United Kingdom 53,306 801,339-6.0% -3.8% 2.6% 3.0% 2.8% -6.9% Australia 37,225 375,395 10.0% 12.6% 17.8% 28.6% -0.4% 0.9% China 43,330 682,415 20.8% 11.8% 9.2% 24.8% 0.5% -3.8% DC Asia- Pacific India 18,620 254,072 15.9% 17.8% 43.7% 52.7% 1.1% 1.1% Japan 16,692 304,318 0.5% 0.2% 2.5% 7.0% -1.7% -5.2% South Korea 17,485 286,052 24.1% 17.0% 11.2% 17.0% 4.5% 0.6% DC Latin America Brazil 13,980 139,385 22.1% 22.0% 61.5% -16.4% -2.3% 6.6% Mexico 32,623 358,916 10.6% 47.4% 76.0% 70.6% 2.6% -3.3% Total 11 DC Markets 1,231,578 18,489,660 4.4% 4.4% Rest of the World 164,027 2,356,448 3.0% 4.0% Total International 1,395,605 20,846,108 4.3% 4.4% Sources: i. Statistics Canada, Frontier counts, custom tabulations ii. IATA-Diio SRS Analyser iii. Bank of Canada Notes: i. Arrival figures are preliminary estimates and are subject to change. ii. Air seat capacity is the variation in the total number of seats on direct commercial scheduled flights during the current month and YTD relative to the same periods in the previous year. iii. The exchange rate variation is calculated on the average value of the Canadian dollar during during the current month and YTD relative to the same periods in the previous year. 4 Tourism Snapshot December

UNITED STATES US to Canada CURRENT MONTH: +3.7% YOY YTD: +3.1% YOY Overnight Dec. YTD % YOY % YOY Automobile 531,727-0.3 7,988,126 0.0 Air 368,257 10.0 4,811,474 6.6 Other 44,428 4.4 1,529,045 9.9 US Total 944,412 3.7 14,328,645 3.1 Source: Statistics Canada, Frontier counts, custom tabulations. Note: The figures are preliminary estimates and are subject to change. Trend Plot: Total United States United States: Key Indicators OVERNIGHT ARRIVALS (000s) 3,000 2,500 2,000 1,500 1,000 500 0 2016 PEAK: DECEMBER JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Air Seat Capacity i December 4.2% YTD 3.8% ii December -4.2% Exchange Rate YTD -2.1% Consumer Confidence December 123.1 Index (1985=100) iii Previous Month 128.6 YTD Arrival Peak iv Current % of Previous Peak 88.6% Previous Peak Year 2002 Source: i. IATA-Diio SRS Analyser, Year-on-year % variance. ii. Bank of Canada, Year on year % variance. iii. Consumer Confidence Index, the Conference Board (USA). iv. Statistics Canada, Frontier counts, custom tabulations. Tourism Snapshot December 5

UNITED STATES After a somewhat rocky start to the year, US overnight arrivals to Canada rounded off the latter half of with a fifth consecutive month of strong growth in December (+3.7%), bringing the annual total to 14.3 million (+3.1% over 2016). Even with the weaker purchasing power of the US dollar in Canada in (-4.2% in December, -2.1% total ), US tourists visited Canada in the highest numbers since 2005. Supported by the steady expansion of air capacity between Canada and the US (+4.2% in December, +3.8% total ), arrivals by air were a driving force behind the growth in US visitation, up 10.0% in December and 6.6% annually compared to 2016. In, the number of US tourists arriving in Canada by air reached a new peak for the third consecutive year and represented 33.6% of total US overnight arrivals, up more than 10 percentage-points compared to the share of air arrivals in 2002 (23.4%). by other modes of transportation, such as bus, train, and cruise, also recorded strong growth (+4.4% in December, +9.9% total ). While auto arrivals were generally on par with 2016 levels, they still continued to make up the largest proportion of US visitors (56.3% in December, 55.7% total ). In, the largest share of US overnight arrivals by vehicle 1 originated from New York (18.0%), Washington (15.1%), and Michigan (11.4%). Among states further from the US-Canada border, the largest proportion of vehicle traffic arrived from California (2.4%) and Florida (2.1%). While the same three states make up the largest share of vehicle arrivals among both US residents and overseas residents driving across the Canada-US border, the data suggest that overseas residents may be more likely than US residents to drive the longer distances from California and Florida 2. Following two months of strong increases, the consumer confidence index published by the US Conference Board dropped 5.5 points to 123.1 in December. 1 States of origin information is based on Integrated Primary Inspection Lane (IPIL) data collected from US residents entering Canada in automobiles with license plate registered in the United States. 2 The US state of departure for overseas resident entering Canada by automobile is based on IPIL information. Some automobiles driven by overseas resident by be rental vehicles. Rented vehicles in one US state may be registered in different state. The state of car registration may not necessarily be indicative of distance driven. 6 Tourism Snapshot December

EUROPE Europe to Canada CURRENT MONTH: -3.3% YOY YTD: +0.7% YOY Overnight December YTD DC Markets % YOY % YOY Other Europe DC Europe 107,211-3.3 1,760,462 0.7 United Kingdom 53,306-6.0 801,339-3.8 France 38,450 2.2 570,803 4.6 Germany 15,455-6.3 388,320 5.2 UK Other Europe 67,862 75.1 1,095,512 23.8 Italy 7,481 22.1 133,944 6.4 Netherlands 6,975 26.0 137,716 2.1 GERMANY Spain 5,672 33.4 94,373 13.2 Switzerland 7,192-6.6 127,138-2.2 FRANCE Rest of Europe 40,542 0.3 602,341 4.2 Trend Plot: Total DC Europe OVERNIGHT ARRIVALS (000s) Total Europe 175,073 0.1 2,855,979 2.0 Source: Statistics Canada, Frontier counts, custom tabulations. Note: The figures are preliminary estimates and are subject to change. 300 250 200 150 100 2016 PEAK: DECEMBER 2016 DC Europe: Key Indicators Air Seat Capacity i Exchange Rate ii YTD Arrival Peak iii December France Germany United Kingdom 2.8% -6.6% 2.6% YTD 2.7% 8.9% 3.0% December 7.5% 7.5% 2.8% YTD -0.1% -0.1% -6.9% Previous Peak Year Current % of Previous Peak 2016 1996 2007 104.6% 85.6% 88.2% 50 0 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Sources: i. IATA-Diio SRS Analyser, Year-on-year % variance. ii. Bank of Canada, Year on year % variance. iii. Statistics Canada, Frontier counts, custom tabulations. Tourism Snapshot December 7

EUROPE In December, Canada welcomed just over 107,000 visitors from Destination Canada s Europe region (-3.3% vs. December 2016), just bringing the total up to a new annual record of 1.76 million visitors (+0.7% vs. 2016). The muted performance from this region in was mainly due to a consistent decline in arrivals from the UK (-3.8% vs. 2016), which faced a deteriorating consumer mood since May in the midst of growing concerns over the economy ahead of Brexit and a weakened British pound in Canada (-6.9% vs. 2016). December (-6.0% vs. December 2016) marked eight consecutive months of declining arrivals to Canada from the UK, with outbound British travel to destinations outside of Europe also trending downward in the latter half of. Steady gains in arrivals from Germany (+5.2%) and France (+4.6%) over the course of the year compensated for the losses from the UK, resulting in an overall positive trend in arrivals from the region. France was the only Europe market to hit new arrivals records for both the month of December (+2.2%) and annually in, while Germany observed its best year for arrivals to Canada since 1999, despite finishing the year with a downturn in December (-6.3%). DC Europe by Port of Entry With overall air capacity for the region up 4.4% year-overyear in, direct air arrivals from Destination Canada s three Europe markets were up slightly compared to 2016 (+0.8%). In, 69.9% of visitors from Destination Canada s three European markets arrived by air directly from overseas, mainly via YYZ (36.3%) and YUL (31.7%). Air from Overseas Air via the US Sea Land via US YYZ YVR YUL YYC All other airports Subtotal All airports All sea borders All land borders France Germany UK 68,834 103,446 274,917 YOY% 10.0% 1.2% -6.3% % of Total 12.1% 26.6% 34.3% 19,473 65,336 143,184 YOY% 6.6% 13.7% 5.3% % of Total 3.4% 16.8% 17.9% 293,382 43,618 52,752 YOY% 9.6% 2.4% -3.4% % of Total 51.4% 11.2% 6.6% 3,643 22,939 70,709 YOY% -34.8% -14.6% -3.0% % of Total 0.6% 5.9% 8.8% 5,066 21,104 42,324 YOY% 1.4% 9.2% 7.8% % of Total 0.9% 5.4% 5.3% 390,398 256,443 583,886 YOY% 6.7% 2.3% -3.4% % of Total 68.4% 66.0% 72.9% 146,877 58,635 114,423 YOY% 3.8% 4.9% -10.2% % of Total 25.7% 15.1% 14.3% 2,041 31,154 45,140 YOY% -40.4% 47.9% 5.7% % of Total 0.4% 8.0% 5.6% 31,620 41,904 57,878 YOY% -9.1% 1.6% -1.9% % of Total 5.5% 10.8% 7.2% Total Overnight 570,803 388,320 801,339 Source: International Travel Survey, Table C, Statistics Canada. Note: The figures are preliminary estimates and are subject to change. Most of the annual decline from the region was in arrivals via the US, both by land (-2.7%) and by air (-1.5%), while arrivals by sea increased significantly (+16.6%) particularly from Germany (+47.9%). 8 Tourism Snapshot December

ASIA-PACIFIC DC Asia-Pacific to Canada CURRENT MONTH: +14.5% YOY YTD: +11.4% YOY Overnight December YTD % YOY % YOY DC Asia-Pacific 133,352 14.5 1,902,252 11.4 Australia 37,225 10.0 375,395 12.6 CHINA SOUTH KOREA JAPAN China 43,330 20.8 682,415 11.8 INDIA India 18,620 15.9 254,072 17.8 Japan 16,692 0.5 304,318 0.2 South Korea 17,485 24.1 286,052 17.0 AUSTRALIA Other Asia-Pacific 52,676 9.7 747,959-0.3 Hong Kong 10,859-17.8 147,335-5.0 Taiwan 5,308 19.3 101,659 0.7 DC Markets Other Asia-Pacific Rest of Asia-Pacific 36,509 8.2 498,965 3.9 Trend Plot: Total DC Asia-Pacific OVERNIGHT ARRIVALS (000s) Total Asia-Pacific 186,028 10.8 2,650,211 8.5 Source: Statistics Canada, Frontier counts, custom tabulations. Note: The figures are preliminary estimates and are subject to change. 250 200 150 100 50 2016 PEAK: DECEMBER Asia-Pacific: Key Indicators Air Seat Capacity i Exchange Rate ii YTD Arrival Peak iii December Australia China India Japan South Korea 17.8% 9.2% 43.7% 2.5% 11.2% YTD 28.6% 24.8% 52.7% 7.0% 17.0% December -0.4% 0.5% 1.1% -1.7% 4.5% YTD 0.9% -3.8% 1.1% -5.2% 0.6% Previous Peak Year Current % of Previous Peak 2016 2016 2016 1996 2016 112.6% 111.8% 117.8% 46.8% 117.0% 0 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Sources: i. IATA-Diio SRS Analyser, Year-on-year % variance. ii. Bank of Canada, Year on year % variance. iii. Statistics Canada, Frontier counts, custom tabulations. Tourism Snapshot December 9

ASIA-PACIFIC With just over 133,000 arrivals in December (+14.5%), total visitation from Destination Canada s Asia-Pacific region reached 1.90 million (+11.4%), setting new monthly and annual peaks for the region. This year s strong performance moved the Asia-Pacific region ahead of Europe as Destination Canada s largest overseas regional market for the first time in. Individually, double-digit gains were recorded from all of Destination Canada s Asia-Pacific markets except Japan in (+0.2%). from India (+17.8%) posted the strongest growth, followed by South Korea (+17.0%), Australia, (+12.6%), and China (+11.8%). All but Japan also reached new arrivals records in, both for the month of December and annually. The performance from this region in is especially notable given that the five Asia-Pacific markets saw relatively weak currency exchange rates with Canada this year. The strength of the Yen compared to the Canadian dollar was particularly poor (-5.2% in ), which may have contributed to the muted performance from Japan. Direct air capacity to Canada from the Asia-Pacific region expanded +22.2% in, led by India (+52.7%), Australia (+28.6%), and China (+24.8%), supporting the particularly strong growth in direct air arrivals (+16.6%). DC Asia-Pacific by Port of Entry Direct air arrivals from Destination Canada s Asia-Pacific region soared by an average of +16.6%, while arrivals via the US averaged +3.6% (+3.8% by land and +2.1% by air), despite contractions from China (-0.2%), India (-6.2%), and Japan (-9.7%). The majority of direct air arrivals from Destination Canada s Asia-Pacific markets in entered the country via YVR (50.3% share of direct air arrivals) and YYZ (41.1% share of direct air arrivals). However, YUL and YYC also saw significant growth this year in arrivals from China. Air from Overseas Air via the US Sea Land via US YYZ YVR YUL YYC All other airports Subtotal All airports All sea borders All land borders Australia China India Japan South Korea 17,545 210,466 129,742 74,618 62,667 YOY% 3.2% 10.7% 42.2% 3.4% 28.6% % of Total 4.7% 30.8% 51.1% 24.5% 21.9% 124,986 252,929 28,908 122,743 76,193 YOY% 34.2% 10.4% 9.4% 11.3% -2.0% % of Total 33.3% 37.1% 11.4% 40.3% 26.6% 2,743 40,573 9,996 1,704 993 YOY% 5.3% 121.3% 10.8% -16.3% 50.7% % of Total 0.7% 5.9% 3.9% 0.6% 0.3% 1,526 13,114 9,038 16,332 1,782 YOY% -1.7% 94.6% 9.2% -18.9% -19.8% % of Total 0.4% 1.9% 3.6% 5.4% 0.6% 995 734 3,681 277 217 YOY% 0.9% 0.2% 2.7% 0.1% 0.2% % of Total 0.3% 0.1% 1.4% 0.1% 0.1% 147,795 517,816 181,365 215,674 141,852 YOY% 28.2% 16.3% 31.1% 5.3% 9.5% % of Total 39.4% 75.9% 71.4% 70.9% 49.6% 141,872 93,113 34,389 62,715 39,447 YOY% 5.1% -1.6% 10.0% -7.5% 12.6% % of Total 37.8% 13.6% 13.5% 20.6% 13.8% 47,652 15,247 9,636 4,387 5,513 YOY% 18.9% -2.4% 4.2% -8.7% 23.7% % of Total 12.7% 2.2% 3.8% 1.4% 1.9% 38,003 56,294 28,711 21,569 99,259 YOY% -11.3% 2.9% -22.4% -15.1% 32.5% % of Total 10.1% 8.2% 11.3% 7.1% 34.7% Total Overnight 375,395 682,415 254,072 304,318 286,052 Source: International Travel Survey, Table C, Statistics Canada. Note: The figures are preliminary estimates and are subject to change. 10 Tourism Snapshot December

LATIN AMERICA DC Latin America to Canada CURRENT MONTH: +13.8% YOY YTD: +39.3% YOY Overnight December YTD % YOY % YOY MEXICO DC Latin America 46,603 13.8 498,301 39.3 Brazil 13,980 22.1 139,385 22.0 BRAZIL Mexico 32,623 10.6 358,916 47.4 Other Latin America Total Latin America 31,177-2.4 366,226 8.3 77,780 6.7 864,527 24.2 Source: Statistics Canada, Frontier counts, custom tabulations. Note: The figures are preliminary estimates and are subject to change. DC Markets Rest of Latin America Arrival Trend Plot Total DC Latin America DC Latin America: Key Indicators OVERNIGHT ARRIVALS (000s) 70 60 50 40 30 20 10 2016 PEAK: DECEMBER Brazil Mexico Air Seat December 61.5% 76.0% Capacity i YTD -16.4% 70.6% ii December -2.3% 2.6% Exchange Rate YTD 6.6% -3.3% YTD Arrival Peak iii Previous Peak Year Current % of Previous Peak 2016 2008 122.0% 134.8% 0 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Sources: i. IATA-Diio SRS Analyser, Year-on-year % variance. ii. Bank of Canada, Year on year % variance. iii. Statistics Canada, Frontier counts, custom tabulations. Tourism Snapshot December 11

LATIN AMERICA Close to 47,000 arrivals in December (+13.8%) brought annual total arrivals from Destination Canada s Latin America region to almost half a million (498,000, +39.3% over 2016). Setting new records for both the month of December and annually, growth from this region was well ahead of all other Destination Canada regions. Both Mexico (+47.4%) and Brazil (+22.0%) also hit new arrivals records individually in. Both of Destination Canada s Latin America markets benefitted from the replacement of the visa requirement with the eta over the last year. This was introduced for Mexican citizens on December 1 st, 2016 and for some Brazilian citizens in May. After averaging an increase in arrivals of 52.5% over the first 11 months of, tourist arrivals from Mexico expanded by 10.6% in December, which still represented a robust performance given the 69.1% jump in December 2016 following the eta implementation. This region s stellar performance in was mainly driven by strong gains in air arrivals, primarily direct to Canada (+60.3%), but also by air via the US (+27.3%). Meanwhile, arrivals via the US by land were down (-12.1%), due to a decline from Mexico (-15.3%). Supporting this performance, Mexico saw the largest expansion of air capacity to Canada of all Destination Canada s key international markets in (+70.6%). From Brazil, air capacity was down overall in (-16.4%) but saw an increase over the last three months of the year (+61.5% in December). While the purchasing power of the Mexican Peso in Canada fell overall in (-3.3%), the Real remained strong compared to 2016 (+6.6%). Air from Overseas Air via the US Sea Land via US YYZ YVR YUL YYC All other airports Subtotal All airports All sea borders All land borders Brazil Mexico 68,796 108,308 YOY% 22.4% 72.9% % of Total 49.4% 30.2% 2,063 61,942 YOY% 24.8% 40.2% % of Total 1.5% 17.3% 2,787 58,192 YOY% 50.3% 141.8% % of Total 2.0% 16.2% 241 10,063 YOY% 65.1% 196.7% % of Total 0.2% 2.8% 253 1,770 YOY% 0.4% 1.3% % of Total 0.2% 0.5% 74,140 240,275 YOY% 23.4% 76.5% % of Total 53.2% 66.9% 57,394 62,982 YOY% 20.9% 33.8% % of Total 41.2% 17.5% 2,555 12,893 YOY% 3.6% 33.3% % of Total 1.8% 3.6% 5,301 42,775 YOY% 25.9% -15.3% % of Total 3.8% 11.9% Total Overnight 139,385 358,916 Source: Statistics Canada, Frontier counts, custom tabulations, Table C. Note: The figures are preliminary estimates and are subject to change. DC Latin America by Port of Entry Overall in, 63.1% of visitors from Destination Canada s two Latin America markets arrived by air directly from overseas. Visitors from Brazil arriving direct by air entered the country almost exclusively at YYZ (92.7%), while those from Mexico primarily crossed the border at YYZ (45.1%), YVR (25.8%), or YUL (24.2%). 12 Tourism Snapshot December

COMPETITIVE REVIEW January to December Trips To: Canada Australia Trips From: YOY Change YOY Change Total International 20,846,108 4.4% 8,810,200 6.5% United States 14,328,645 3.1% 781,000 9.0% Canada 167,300 10.0% United Kingdom 801,339-3.8% 731,900 2.3% Europe France 570,803 4.6% 129,700 0.5% Germany 388,320 5.2% 208,200 4.4% Australia 375,395 12.6% Japan 304,318 0.2% 434,600 4.0% Asia-Pacific South Korea 286,052 17.0% 301,800 7.7% China 682,415 11.8% 1,355,500 12.2% India 254,072 17.8% 302,200 15.2% Latin America Mexico 358,916 47.4% 11,300 22.8% Brazil 139,385 22.0% 55,600 17.5% Total DC Key Markets 18,489,660 4.4% 4,479,100 8.2% Sources: Statistics Canada, Frontier counts, custom tabulations. Australian Bureau of Statistics, Overseas and Departures, cat. no. 3401.0. With just over 20.85 million international arrivals in, Canada welcomed approximately 12 million more international tourists than Australia (8.81 million) this year, while Australia continued to make good progress with slightly faster year-over-year growth (+6.5% vs. Canada s +4.4%). Canada welcomed more than four times more visitors than Australia from Destination Canada s 11 core international markets (18.49 million to Canada vs. 4.48 million to Australia). These markets made up 89% of Canada s visitors and 49% of Australia s visitors in, despite Australia s stronger year-over-year growth from these markets (8.4% vs. 4.4% for Canada). In, Canada welcomed more visitors from Destination Canada s core markets in Europe and Latin America, while Australia received more visitors from Destination Canada s Asia-Pacific markets, including nearly twice as many arrivals from Australia s primary market of China (1.36 million to Australia, vs. 682,415 to Canada). Well over double the number of Australian tourists visited Canada (375,395, +12.6%) than Canadian tourists visited Australia (167,300, +10.0%) overall in. For Canada s primary market of the United States, this trend was particularly apparent. Canada welcomed US tourists in much higher numbers in (14.33 million to Canada vs. 781,000 to Australia), but compared to 2016 this market grew at three times the pace in Australia (+9.0%) than in Canada (+3.1%). Tourism Snapshot December 13

INTERNATIONAL ARRIVALS BY PROVINCE OF ENTRY Overnight by Province of Entry January to December Newfoundland and Labrador Prince Edwad Island Nova Scotia New Brunswick Québec Ontario Total One or more nights US Residents by Automobile US Residents by Non-Automobile Residents from Other Countries 68,821 2,518 249,915 353,253 3,141,261 9,774,194 YOY% 10.6% -59.8% 12.5% -2.3% 7.0% 4.2% Change YOY 6,619 (3,744) 27,799 (8,399) 205,011 396,209 0 0 14,463 251,201 1,096,586 4,286,040 YOY% 0.0% 0.0% 22.9% 0.1% 0.9% 0.4% Change YOY - - 2,692 233 10,089 15,845 14,136 1,958 151,717 88,408 863,818 2,689,280 YOY% 28.8% -52.5% 12.7% -8.5% 10.3% 7.0% Change YOY 3,158 (2,168) 17,096 (8,160) 80,350 175,654 54,685 560 83,735 13,644 1,180,857 2,798,874 YOY% 6.8% -73.8% 10.6% -3.3% 10.7% 7.9% Change YOY 3,461 (1,576) 8,011 (472) 114,572 204,710 Source: Statistics Canada, Frontier counts, custom tabulations. Preliminary estimates subject to change. 14 Tourism Snapshot December

Overnight by Province of Entry January to December Manitoba Saskatchewan Alberta British Columbia Yukon CANADA Total One or more nights US Residents by Automobile US Residents by Non-Automobile Residents from Other Countries 221,227 78,962 1,076,401 5,713,926 165,630 20,846,108 YOY% 4.0% -5.9% 6.1% 3.3% 2.8% 4.4% Change YOY 8,485 (4,942) 61,578 181,700 4,472 874,553 143,518 58,001 158,333 1,890,463 89,521 7,988,126 YOY% 5.9% 6.9% 1.2% -2.5% 8.4% 0.0% Change YOY 7,994 3,764 1,933 (49,180) 6,972 342 68,628 18,537 589,037 1,800,611 54,389 6,340,519 YOY% 0.5% -31.5% 11.9% 7.1% -4.9% 7.4% Change YOY 330 (8,510) 62,427 119,118 (2,792) 436,503 9,081 2,424 329,031 2,022,852 21,720 6,517,463 YOY% 1.8% -7.5% -0.8% 5.8% 1.4% 7.2% Change YOY 161 (196) (2,782) 111,762 292 437,943 In, the top provinces of entry to Canada were Ontario (46.9%), followed by British Columbia (27.4%) and Quebec (15.1%). The same provinces also saw the greatest total increase in international arrivals compared to 2016: Ontario (+396,000 arrivals), Quebec (+205,000), and British Columbia (+182,000). Proportionally, strong year-over-year growth was also recorded in Nova Scotia (+12.5%), Newfoundland (+10.6%), and Alberta (+6.1%). For those provinces that saw a decrease in total international arrivals in New Brunswick, Saskatchewan, and Prince Edward Island the declines were attributable to a combination of fewer non-auto US arrivals and overseas arrivals. Overall auto arrivals to British Columbia fell below 2016 levels (-2.5%), following severe wildfires over the summer of ; however, total international arrivals to the province were still up +3.3% year-over-year due to increased non-auto US visitors and overseas visitors. US auto arrivals to all other provinces in were on par or ahead of 2016 levels. Tourism Snapshot December 15

CANADIAN OUTBOUND TRAVEL Overnight Trips by Canadians December YOY % Jan.- Dec. YOY % United States 1,368,266 7.7 20,205,839 4.8 Other Countries 1,012,207 6.4 12,849,820 7.2 Total Trips from Canada 2,380,473 7.2 33,055,659 5.7 Source: Statistics Canada, International Travel Survey. Note: The figures are preliminary estimates and are subject to change. Overnight trips by Canadians to international destinations continued to trend upward in December, reaching 2.4 million (+7.2%), with more outbound trips recorded to the US (+7.7%) and to other international destinations (+6.4%). Overall in, Canadians travelled more internationally than they did in 2016 (33.1 million trips, +5.7%). In particular, Canadians took more trips to the US (+4.8%) and especially to overseas destinations (+7.2%) this year. While the majority of Canadian residents trips to the US were taken by automobile (53%), the biggest year-overyear growth was recorded in trips by air (+9.1%). The Canadian Consumer Confidence Index (published by the Conference Board of Canada) improved for a third consecutive month in December, climbing a notable 7.3 points to reach 128.4 at the end of the year. 16 Tourism Snapshot December

ACCOMMODATION Hotel Performance Indicators by Province Occupancy Rates Average Daily Rate (ADR) Revenue Per Available Room (RevPAR) Dec. YOY^ Jan.- Dec. YOY^ Dec. YOY % Jan.- Dec. YOY % Dec. YOY % Jan.- Dec. YOY % Alberta 1 41.3% 2.6 53.7% 1.5 $122.46-0.4% $130.03-0.9% $50.62 6.3% $69.84 2.0% British Columbia 54.4% 0.9 70.1% 2.0 $173.11 6.3% $172.51 6.5% $94.10 8.1% $121.01 9.6% Saskatchewan 41.5% 1.4 54.0% 0.4 $113.55-4.6% $119.35-4.7% $47.17-1.3% $64.42-4.0% Manitoba 53.3% 1.4 68.5% 5.3 $118.43 2.1% $123.39 1.8% $63.09 4.9% $84.48 10.3% Ontario 53.2% 1.8 69.3% 1.6 $141.56 5.2% $154.75 6.3% $75.34 8.8% $107.19 8.8% Quebec 55.3% 0.9 70.3% 2.3 $163.27 3.4% $167.99 5.9% $90.29 5.2% $118.16 9.5% New Brunswick 39.2% 1.3 60.7% 2.5 $111.43 3.7% $121.43 4.3% $43.65 7.4% $73.68 8.7% Nova Scotia 43.4% 1.7 67.2% 2.7 $122.11 2.5% $141.20 7.8% $53.01 6.6% $94.82 12.4% Newfoundland 36.2% -3.2 62.4% 0.6 $129.86 1.1% $144.97-1.0% $47.00-7.2% $90.50 0.1% Prince Edward Island Northwest Territories 31.7% -3.6 57.9% 0.7 $107.18 11.3% $144.91 7.2% $33.96-0.1% $83.96 8.4% 70.7% 4.7 71.7% 2.7 $147.45 0.2% $142.40-5.5% $104.32 7.2% $102.16-1.8% Yukon 44.6% -0.3 67.6% 0.3 $119.42 5.0% $133.11 6.9% $53.30 4.3% $89.97 7.4% Canada 50.0% 1.6 65.6% 1.8 $147.29 3.8% $155.10 4.8% $73.67 7.3% $101.69 7.8% Note: Based on the operating results of 247,228 rooms (unweighted data). ^ Percentage points. 1 Excluding Alberta resorts. Source: CBRE Hotels with reproduction and use of information subject to CBRE Disclaimer / Terms of Use as detailed at www.cbre.ca. Users of this information are advised that CBRE Hotels does not represent the information contained herein to be definitive or all-inclusive. CBRE Hotels believes the information to be reliable, but is not responsible for errors or omissions. In December, the National Occupancy Rate was at 50.0%, up 1.6 points over December 2016, bringing the annual rate to 65.6%, up 1.8 points over 2016. Both for the month of December and overall in, the highest occupancy rates were recorded in Northwest Territories (70.7% in December, 71.7% total ), Quebec (55.3% in December, 70.3% total ), and British Columbia (54.4% in December, 70.1% total ). Overall in, Manitoba (up 5.3 points), Nova Scotia (up 2.7 points), and Northwest Territories (up 2.7 points) posted the strongest year-overyear growth in occupancy rate. Overall in the national average daily rate (ADR) reached $155.10, up 4.8% over 2016. Provincially, the highest ADR in was recorded in the three provinces with the highest international arrivals for the year British Columbia ($172.51), Quebec ($167.99), and Ontario ($154.75). While year-over-year growth in ADR was strong in these three provinces, the strongest growth was observed in Nova Scotia (+7.8%), Prince Edward Island (+7.2%), and Yukon (+6.9%). At the national level, the revenue per available room (RevPar) also climbed significantly in, reaching $101.69 (up 7.8% over 2016). Once again, the strongest annual performance on this metric was observed in British Columbia ($121.01), Quebec ($118.16), and Ontario ($107.19). However, the biggest gains compared to 2016 were posted in Nova Scotia (+12.4%), Manitoba (+10.3%), and British Columbia (+9.6%). While a handful of provinces and territories registered overall annual declines in ADR and RevPar compared to 2016, occupancy rates were up year-over-year across Canada in. Tourism Snapshot December 17

ACCOMMODATION Hotel Performance Indicators by Property Type Occupancy Rates Average Daily Rate (ADR) Property Size Dec. YOY^ Change Jan.- Dec. YOY^ Dec. YOY Jan.- Dec. YOY Under 50 rooms 37.0% 1.1 52.5% 2.8 $109.99 3.3% $113.30 4.2% 50-75 rooms 44.8% 2.1 59.8% 2.5 $108.62 3.4% $117.78 2.9% 76-125 rooms 48.0% 1.5 63.6% 2.3 $122.83 1.8% $130.79 2.6% 126-200 rooms 49.4% 1.0 66.1% 1.4 $133.09 4.7% $141.79 5.4% 201-500 rooms 54.6% 2.8 69.0% 1.6 $176.04 4.4% $183.39 6.1% Over 500 rooms 57.6% -0.5 74.2% 0.3 $217.58 5.3% $231.28 7.6% Property Type Total 50.0% 1.6 65.6% 1.8 $147.29 3.8% $155.10 4.8% Limited Service 45.4% 1.7 60.6% 2.5 $110.28 2.4% $118.11 3.4% Full Service 51.8% 1.5 68.2% 1.4 $149.78 4.6% $167.81 5.9% Suite Hotel 58.6% 2.2 74.2% 1.1 $154.97 3.4% $159.77 3.1% Resort 52.7% 1.6 63.5% 1.9 $314.07 5.3% $244.72 6.4% Price Level Total 50.0% 1.6 65.6% 1.8 $147.29 3.8% $155.10 4.8% Budget 44.7% 1.0 59.7% 2.7 $95.51 6.0% $103.16 7.2% Mid-Price 50.0% 1.8 66.2% 1.5 $134.00 2.3% $146.39 3.8% Upscale 57.2% 1.2 71.1% 1.5 $255.48 4.6% $254.66 5.7% Total 50.0% 1.6 65.6% 1.8 $147.29 3.8% $155.10 4.8% Note: Based on the operating results of 237,545 rooms (unweighted data). ^ Percentage points. In, occupancy rate generally increased by property size, ranging from 52.5% for the smallest properties (<50 rooms) to 74.2% for the largest properties (500+ rooms). However, those smaller properties (+2.8 percentage points) saw larger year-over-year increases in occupancy rate than larger properties (+0.3 percentage points). ADR also increased by property size in, ranging from $113.30 to $231.28; however, larger properties (500+ rooms) also recorded stronger year-over-year growth in ADR than smaller properties. Suite hotels recorded the highest occupancy rates in (74.2%), though Limited service hotels saw the biggest increase over 2016 occupancy rates (+2.5 percentage points).the highest ADR in was found at resorts ($244.17), which also saw the biggest increase over 2016 (+6.4%). Upscale properties reported the highest occupancy rate (71.1%) and ADR ($254.66) in, but budget properties posted the biggest increases compared to 2016 for both occupancy (+2.7 percentage points) and ADR (+7.2%). These general trends in may suggest that as room rates climb and room availability falls at larger, more highend properties, travellers are turning toward smaller, more budget-friendly accommodations characterized by lower occupancy rates and average daily rate, but benefitting from larger increases in both rates. DC CONSUMER AND MARKET INTELLIGENCE 18 Tourism Snapshot December